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September 10, 2003
Music and the RIAA
Let me start by saying one thing - I do not have any pirated music and I do not condone piracy.
Now that is over and done with, lets look at the real world. There have been a couple of interesting comments around related to the most recent set of lawsuites. Check out MacCentral and The Register as starting points.
I also need to point out IANAL but I do like to argue about things I know nothing about (and if you really want a lawyer, try Steve).
In Australia you can get in trouble for "Aiding and Abetting" a criminal - that is being involved in a crime without actually being the one commiting the crime. So if you hand the murderer the gun or you help clena the knife, you are aiding and abetting. In this case I reckon the RIAA and the member companies come pretty close to aiding and abetting.
Lets do the maths. What does in cost to burn a CD? Well I burn CDs all the time and I pay less than $AU1 per CD. At the scale a recording studio uses, the prices should be measured in cents (US - pennies) but the quality is (presumably) better so lets use $AU1 as the cost. How much does the artist get? $0.50, $1, $2? As far as I can determine the amount appears to be sub $1 but lets be generous and give the artist $AU2. So total cost is $AU3 plus marketing and markup. There is the studio who produced the music (probably fixed cost not % of sales), the company that "owns the star" (who presumably take their cut from the artists fee - say 20 - 35% = $0.40 - $0.70 per CD), and the retailer. Being generous and allowing a fixed cost for the studio and 100% markup, I would expect to but the CD's for less than $AU10.
So why are they usually $AU25+?
Turn the question around the other way. How many songs are there on a CD? 10, 12, 15? Say 10 songs that are worth listening to. Now buy the tracks at the iTunes Music Store - cost = $US9.90. Buy the CD for $US15.00 - $US20? Still sounds like a lot of markup on both sides. There is no longer any distribution issue, or hardware involved, and only one layer of retailing. $5 for the physical media seems expensive and 99c per song isn't all that cheap either.
Besides as one of The Register readers mention (link above), what you are really buying is a licence to listen to the music - not a CD. So, if high prices are artificially inflated, does that encourage piracy? Is the RIAA (and it's members) effectively handing the weapon and encouraging assult?
I think the most daming comment was the RIAA official who stated that the funds from sucessful prosecution would not go to the artist (who missed out on their royalty cheque) but to the RIAA's enforcement fund. Talk about standover tactics!
Some of the nicest music I have in my collection comes from listening to the artists and buying a CD direct from them. Cheap ($AU5) but no middle-man to get involved in jacking up the price.....
Posted by Ozguru at September 10, 2003 08:09 AM
